Some Alarm.com Holdings, Inc. (NASDAQ:ALRM) shareholders may be a little concerned to see that the Corporate Secretary, Daniel Ramos, recently sold a substantial US$508k worth of stock at a price of US$61.81 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 100% of their entire holding.
Alarm.com Holdings Insider Transactions Over The Last Year
Notably, that recent sale by Daniel Ramos is the biggest insider sale of Alarm.com Holdings shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$59.54. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
In the last year Alarm.com Holdings insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Alarm.com Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Alarm.com Holdings insiders own about US$141m worth of shares (which is 4.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Alarm.com Holdings Insiders?
Insiders sold Alarm.com Holdings shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Alarm.com Holdings is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Alarm.com Holdings has 1 warning sign we think you should be aware of.
But note: Alarm.com Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.